EU, IMF insist no creditor deal for Greece yet

AFP, ATHENS

Fri, Oct 26, 2012 - Page 15

Greek Finance Minister Yannis Stournaras announced he had agreed a new austerity deal with international creditors, but the EU and IMF insisted that while there had been progress, no deal had yet been thrashed out.

Stournaras told parliament on Wednesday the so-called troika had granted a long-sought extension in return for a 13.5 billion euro (US$17.5 billion) austerity package needed to unlock funds vital to keep the country afloat.

However, officials at both the EU and the IMF were quick to make it clear that the troika had not yet reached any agreement with Athens.

“Substantial progress has been made in talks with Greece, but a few outstanding issues remain before a staff-level agreement can be reached,” a spokesman for European Economic Affairs Commissioner Olli Rehn said in a tweet.

The IMF issued a similar message soon after.

“There has been progress in recent days, but some outstanding issues remain to be agreed upon to reach full staff-level agreement,” a spokesman said. “Furthermore, financing issues will be discussed between the official lenders and Greece.”

European Central Bank (ECB) chief Mario Draghi also said that while there had been progress “the review is not finished yet.”

The EU has been negotiating alongside the ECB and the IMF on a new round of spending cuts and reforms by Greece to unlock a 31.2 billion euro installment from its rescue loans.

A finance ministry source had said earlier that the government hoped to present the deal to a Eurogroup meeting yesterday, ending talks that have dragged on since July.

However, Finance Minister Wolfgang Schaeuble of key paymaster Germany said: “As far as the German government knows there are no new findings. When the proposals [from the troika] are on the table, the Eurogroup will look at them. There is nothing more to add.”

Earlier on Wednesday, ECB executive board member Joerg Asmussen said that if Athens did get another two years to implement its reforms, other members of the 17-nation eurozone would have to lend it more money to bridge the deficit shortfall.

Athens recently pledged 7.8 billion euros in cuts next year, only to be told by the troika that an effort of 9.2 billion euros was required to counterbalance the effects of the recession.